Waldron v. Armstrong Rubber Co., Docket No. 17327--8
| Decision Date | 13 October 1975 |
| Docket Number | Docket No. 17327--8 |
| Citation | 18 UCC Rep.Serv. 963,236 N.W.2d 722,64 Mich.App. 626 |
| Parties | Lester K. WALDRON and Ramona Waldron, Plaintiffs-Appellants, v. ARMSTRONG RUBBER COMPANY, a corporation, and Sears, Roebuck & Company, a corporation, Defendants-Appellees. ACCIDENTAL FIRE & CASUALTY COMPANY OF NORTH CAROLINA, a corporation, subrogee of Robert E. Crakes, Plaintiffs-Appellants, v. ARMSTRONG RUBBER COMPANY, a corporation, and Sears, Roebuck & Company, a corporation, Defendants-Appellees. 64 Mich.App. 626, 236 N.W.2d 722, 18 UCC Rep.Serv. 963 |
| Court | Court of Appeal of Michigan — District of US |
[64 MICHAPP 628] Kiefer, Allen & Ryan, Detroit, for plaintiffs-appellants; Demetre J. Ellias, West Branch, of counsel.
Plunkett, Cooney, Rutt & Peacock by Jeannette A. Paskin, Detroit, for defendants-appellees.
Before LESINSKI, C.J., and McGREGOR and BASHARA, JJ.
Previously, 1 we held that plaintiffs' cause of action for breach of warranty sounded in tort under Michigan law and that, by application of our 'borrowing' statute, 2 the 2-year Indiana statute of limitations pertaining to tort claims barred the plaintiffs' suit. However, our Supreme Court vacated our order 3 and remanded the case back to us for reconsideration and determination of whether Indiana would apply the 4-[64 MICHAPP 629] year limitation period established by UCC § 2--725 4 or the 2-year limitation period applicable to actions for injuries to persons or property. 5 Therefore, we will now attempt to make that determination and reconsider this action in light thereof.
At the outset, we are confronted with a major obstacle. Neither Indiana's highest court nor the Federal courts in applying Indiana law have decided the issue presented. Thus, we have at least two possible options: (1) Either we could attempt to predict what the Indiana Supreme Court would decide if this issue were presented and thereby, in effect, create limited precedent for the Indiana courts, or (2) We could simply state that, since Indiana's highest court has not decided this issue, there is no Indiana law to apply and that, as a result, Michigan law will apply. While the choice of either option has merit, we believe that in light of our Supreme Court's directive, the proper course is to pursue the first option and to predict what limitations period the Indiana Supreme Court would apply.
In making this prediction, we note that the Indiana Court of Appeals, applying Indiana law, has had an opportunity to discuss the priority of the UCC's limitations period for breach of warranty vis-a-vis another statutory limitations period.
In Helvey v. Wabash County REMC, 151 Ind.App. 176, 278 N.E.2d 608 (1972), the plaintiff brought an action for breach of express and implied warranties against the defendants for damages caused to household appliances by the furnishing of electricity at excessive voltage. The electric company defended on the basis that the UCC's 4-year statute of limitations [64 MICHAPP 630] applied and that more than 4 years had accrued since the accident occurred. The plaintiff countered by arguing that electrical energy is not a transaction in goods under the UCC, but rather, a furnishing of a service, and that as a result, Indiana's 6-year statute of limitations on contract actions should apply. In deciding the issues presented in favor of the defendant, the Indiana Court of Appeals made the following statement:
The Indiana court, in further discounting Helvey's claim that the Indiana 6-year statute applies, made the following observation which is relevant to the case before us:
(Emphasis added.) 278 N.E.2d at 610.
[64 MICHAPP 631] We interpret this statement to mean that if the transaction is Not covered by the UCC, then the Indiana courts would apply their 2-year statute of limitations; on the other hand, if the transaction Is covered by the UCC, then the Indiana courts would apply the 4-year statute of limitations contained therein.
We believe that the Indiana courts would hold that the present controversy is under the purview of the Uniform Commercial Code and that, as a result, they would apply its 4-year statute of limitations to this action. We reach this result for two reasons. First, the Court in Helvey noted that one of the principal underlying purposes of the UCC is 'to make uniform the law among the various jurisdictions', and that by applying the UCC's provisions concerning breaches of express and implied warranties in cases similar to the present case, that purpose would be furthered. Secondly, the Helvey court cited the Gardiner case with approval. This case held that the 4-year statute of limitations of the Uniform Commercial Code prevailed over Pennsylvania's general 2-year statute of limitations pertaining to tort actions. In relying on this single Indiana Court of Appeals decision, we reiterate the fact that we could find no decisions by the Indiana Supreme Court or the Federal courts which would be of useful guidance in determining the issue presented.
However, having decided that Indiana would apply the UCC's 4-year statute of limitations to the facts presented, our inquiry is not ended. This is because the same section of the UCC which provides for the 4-year statute of limitations also provides for the determination of when that limitation period commences to run. UCC § 2--725 provides in part:
Therefore, under UCC 2--725(2), the breach of warranty in the instant case occurred when the goods were delivered to the plaintiff on August 27, 1968, and as a result, plaintiff's cause of action accrued as of that date, thereby triggering the beginning of the 4-year statute of limitations. 7
This accrual provision becomes important because Michigan has adopted the Uniform Statute of Limitations on Foreign Claims Act, 8 which provides in part:
'(1) As used in this section, 'claim' means any right of action which may be asserted in a civil action or proceeding and includes, but is not limited to, a right of action created by statute.
'(2) The period of limitation applicable to a claim accruing outside of this state shall be either that prescribed[64 MICHAPP 633] by the law of the place where the claim accrued or by the law of this state, whichever bars the claim.'
Thus, we must apply either the Indiana 4-year statute of limitations or the relevant Michigan statute of limitations, whichever bars the claim.
In determining the relevant Michigan statute, it is important to note that the 'borrowing' statute uses the term 'claim' and defines it as 'any right of action which may be asserted in a civil action'. Under Michigan law a right of action for breach of warranty is treated as a tort claim and, therefore, the Michigan courts would presumably apply the general 3-year statute of limitations 9 for an action instituted to recover for personal injuries. See State Mutual Cyclone Insurance Co. v. O & A Electric Cooperative, 381 Mich. 318, 161 N.W.2d 573 (1968). 10
On this basis, it appears that the application of the shorter Michigan 3-year statute of limitations is warranted by the facts of the instant case.
The crucial question that now arises is on what date should the Michigan 3-year statute of limitations have begun running. If it commenced to run on the accrual date provided by Indiana law under UCC 2--725 (August 27, 1968), plaintiffs' action will then be barred, as their action was not commenced until July 6, 1972, more than three years later.
On the other hand, M.C.L.A. § 600.5833; M.S.A. § 27A.5833 provides that a claim based on breach of [64 MICHAPP 634] warranty of quality or fitness accrues at the time that the breach of the warranty is discovered or reasonably should be discovered. See Parrish v. B. F. Goodrich Co., 46 Mich.App. 85, 207 N.W.2d 422 (1973). Thus, plaintiffs' breach of warranty claim presumably was discovered on the date of the accident, July 15, 1969, and, applying Michigan law to the facts, the 3-year statute of limitations would not bar this claim as this suit was commenced within three years of this accrual date.
In Parrish, supra, our Court held that M.C.L.A. § 600.5833 should be considered as the tolling statute when read in conjunction with UCC 2--725. The Court stated:
'We also note that the enactment of the commercial code, effective in Michigan on January 1, 1964, did not operate to repeal M.C.L.A. § 600.5833, Supra. See M.C.L.A. § 440.991; M.S.A. § 19.9991, and M.C.L.A. § 440.9992; M.S.A. § 19.9992. Therefore, reconciliation of the two statutes is in order.
'M.C.L.A. § 440.2725, Supra, also provides:
"(4) This section does not alter the law on Tolling of...
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